Wednesday, April 8, 2015

Greece sells short-term bills and raises €1bn

Financial TimesApril 8, 2015

Greece sold €1.14bn of six-month Treasury bills on Wednesday, gaining some breathing room as the country negotiated with international creditors over a bailout package, with several billion euros worth of debt falling due in the coming weeks.

Although Greece has cobbled together sufficient funds to repay international creditors this month, its cash reserves will probably be depleted by the end of April, raising the risk of Greece leaving the eurozone.

“The probability of Grexit is higher than it’s ever been since the start of the euro,” said one European banker.

Lacklustre demand characterised the sale of bills at a yield of 2.97 per cent, a short-term borrowing cost well above other members of the eurozone. A closely scrutinised metric of demand at auctions hovered near the lowest level since 2006 at 1.3 times, according to data from Bloomberg. That matched the coverage ratio at a previous auction in March.

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This blog is dedicated to the understanding of the current Greek (but also European) economic, political and institutional crisis. It was created by Prof. Aristides Hatzis of the University of Athens, after many requests by his students who seek a source of reliable analysis on the Greek current affairs. Its aim is to post commentary and reports published mainly in the major U.S. and European media and to encourage a rigorous discussion.